China's Solar Boom Powers Silver to $65 an Ounce

Silver has been gaining momentum, climbing past $65 an ounce as China's solar boom drives a quiet rally. The metal is still running harder than gold, and its reasons for growth go beyond inflation. Silver is trading like both a precious metal and an industrial input, making it a unique investment opportunity.

The latest inflation numbers helped silver's first engine, investors seeking shelter from unstable currencies and inflation, gain traction. However, the July CPI report showed headline inflation at 3.4% year-over-year, which, although above the Federal Reserve's target of 2%, was soft enough to lift expectations that the Fed will hold rates steady at its September meeting.

The second engine driving silver's growth is China's industrial machine. Chinese imports of silver-bearing ore jumped 62.5% year-over-year in June as solar and grid manufacturers scramble for a metal that the market can't mine quickly enough.